A large number of homeowners are ditching their holiday plans to pay the mortgage, a new survey has found.
The latest Bankwest/Mortgage and Finance Association of Australia (MFAA) home finance index found that more than 50 per cent of respondents are giving up a range of everyday necessities to accommodate higher interest rates.
“With interest rates higher than last year, many mortgage holders seem to be holding back on their spending,” Bankwest retail chief executive Vittoria Shortt said releasing the survey findings on Thursday.
The survey of more than 1,000 homeowners across Australia found 50 per cent saying they were eating out less, while 47 per cent said they were also reducing costs at home and the same amount said they were now taking a packed lunch to work.
Forty-two per cent said they were going on cheaper holidays or not taking breaks at all, while 40 per cent said they were buying their food in bulk.
“There is a clear move to more thrifty spending for many Australian households,” Ms Shortt said.
Other measures people are taking to help improve their finances include buying extra lotto tickets (17 per cent), selling unused items rather than throwing them out (20 per cent), taking on additional work (11 per cent) and paying less on insurance and superannuation contributions (15 per cent).
“Although some of the cost cutting strategies may seem extreme … it’s actually down to principals of good financial management,” MFAA chief executive officer Phil Naylor said.
“Borrowers can’t avoid rising interest rates, but they can minimise the impact by considering making an extra mortgage repayment with extra funds that would have otherwise been used for things like holidays.”